Successful supplier management occurs when both sides work together for mutual benefit. As the best performing procurement functions know, it is not about something that’s done to suppliers, but instead relies on true collaboration between both parties.
That collaboration ultimately depends on people. It often starts with one person on the buyer’s side, with all humility, starting a conversation with their supplier counterpart to find out what they can improve, what they can do differently.
The success or failure of supplier management programmes rests on how you communicate with and understand one another, and the skills required to achieve this are more behavioural than they are technical.
This is borne out by the results of the State of Flux 2020 research into SRM. More than 400 companies participated in last year’s annual survey and of the competencies they identified for supplier management, the top five were all behavioural. Among those most needed were communication skills, influencing, the ability to employ a systematic approach using systems thinking, facilitation and communication. Meanwhile, technical and contract knowledge were much lower on the roll-call of necessary qualities. Having individuals in place with the correct soft skills to make a relationship work is essential.
The next part of the puzzle is to ensure that it’s not only the supplier managers who understand the importance of this balanced, collaborative approach. It only works if you bring the rest of the business with you. If you have an executive who is ultimately accountable for the relationship, they too will need to apply this same mindset to help manage that partnership. Otherwise you risk suppliers experiencing an inconsistent or inauthentic message about working together for shared gain. At that point, any progress you make may be lost or become a one-off event, rather than achieve repeatable, scalable value.
While it is the role of the supplier manager to develop the relationship, they may not always understand the technical aspects of each product, service or deal. What is key, is that they act as a business-to-business coach in a supply chain setting. They need to probe how the buyer’s side could do things differently to make improvements. They need to be curious and try to guide and coax the answers from those who understand the precise offering or process on both sides and be an expert at extracting the ideas and information that will create an advancement. Leave the bias behind, and find out what’s best for you both.
This topic was discussed in more detail in a State of Flux-hosted webinar, as part of a three-part series on the subject of delivering commercial value. The key takeaways from that discussion were:
- Communication and behavioural-based ‘soft’ skills are more important than technical ability when it comes to supplier management.
- Bring the rest of the business with you and ensure anyone who interacts with a key supplier understands the collaborative approach you’re trying to achieve and mirrors it.
- Find out what is best for both the buyer and supplier side and how you can achieve it together.
Click here to register now for the 13th annual supplier management summits online. In these difficult times, business leaders have looked to procurement to protect and strengthen their supply chains - procurement has stepped-up to show what it can do. Hear the results of our research and a discussion with a distinguished panel of procurement leaders on how their supplier management strategies have helped them grow and protect value in all its forms.
State of Flux offers training to help organisations put behavioural skills into context. To discuss this or find out more about how you can deliver value through supplier management, email enquiries@stateofflux.co.uk or call one of our branches: https://www.stateofflux.co.uk/contact
